ICSID suspends decision in favour of Turkish company, relieves Pakistan

ISLAMABAD: Pakistan has won a revision decision after the International Centre for Settlement of Investment Disputes (ICSID) suspended the decision given in favour of Turkish power company Karkey Karadeniz.

The ICSID in a decision in August, 2017, made a compensation award worth above $860 million to Karkey after the company filed a case against the government of Pakistan for terminating its rental power contract on orders of the Supreme Court.

According to the earlier decision, Pakistan had to pay damages and per month interest, which is now approaching $900 million.

The PTI government initiated review proceedings in the ICSID over the earlier decision in Karkey Karadeniz versus Pakistan case.

Pakistan gathered fresh evidence of graft in the rental power project (RPP) contract by the Turkish company, after which the ICSID suspended its earlier decision.

Turkish company Karkey had obtained a contract from the government of Pakistan for the supply of electricity under its policy of the Rental Power Projects (RPPs) that had been launched to meet the shortfall of electricity.

The Supreme Court, subsequently declared all RPPs contract void and directed the National Accountability Bureau to investigate the matter.

After the court decision Karkey initiated proceedings in ICSID under Pakistan Turkey Bilateral Investment Treaty in January 2013.